As the non-financial mainstream media begin focusing on Sunday’s Swiss gold referendum, USA Today reports a Bank of America prediction that “the price of gold could jump to more than $1,350 an ounce — an increase of 18%,” if the “yes” vote prevails. And a Guardian article, headlined “Fears that ‘dangerous’ Switzerland referendum could spark gold rush,” refers to a quote by the chairman of the Swiss National Bank, who said during a ‘sermon’ he delivered at a Swiss church, “The initiative is dangerous because it would weaken the SNB.”

But the lion’s share of the Guardian‘s quotes come from precious metals analyst and blogger Koos Jansen, who calls the Swiss initiative “merely part of a increasing global scramble towards gold and away from the endless printing of money,” adding that “While those behind the Swiss initiative have often been portrayed as crazy, they’re merely acting out of fear that their central bank is losing control of its monetary policy, and of the Swiss franc being sucked into this currency war and losing its value.”

In a Mineweb article published earlier this week, by Lawrence Williams and headlined “Elliott Wave analyst sees big gold and silver price surge ahead,” Williams reference’s Wikipedia’s definition of Elliott Wave as “a form of technical analysis that some traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors.”

In addition to the analyst cited by Mineweb,Peter Goodburn, another prominent Elliott Wave adherent is Avi Gilburt, whose articles are regularly published on Seeking Alpha.

Gilburt, who is more an analyst of, than advocate for precious metals, takes up their cause in his latest missive. “I do not often write about the metals on MarketWatch,” he begins, “but have seen too many bearish articles calling for the death to the metals, so I felt compelled to speak up. While many are now saying it is time to sell metals, I will have to disagree. The time to sell your metals was several years ago. Now is the time to start looking to buy them back.”

As it’s argued that the silver bears are running out of steam, or already have, but with the gold/silver ratio still above 74 as of Wednesday, Numismaster‘s Patrick Heller raises the prospect of swapping your gold for silver. He points out that the ratio “has been in the 50s much of the time over the past few years,” and he expects “a long-term equilibrium to hit somewhere around 35:1 to 40:1 between the two metals.” That said, Heller presents a number of well thought-out factors to consider, and comes down on the side of “a definite maybe,” depending on the circumstances of the trade and your current holdings. And he concludes by emphasizing that the swapping question “is different than asking if one should own any precious metals at all. A decision to own physical gold or silver is what I think of as buyinginsurance against the risk of calamities with paper assets such as stocks, bonds and currencies.”

It’s hard to extoll the virtues of silver in the face of a price decline. We anticipate gains for our clients and are disappointed in the recent results. A lot of people rely on our advice and we don’t want to let them down. We all do better when our clients experience gains.

That said, are we ever going to get to the promised land? Right now the byword is patience. A clear understanding of what’s causing the recent decline will be helpful in plotting the future. As you know, we rely on silver analyst Theodore Butler to chart our course and fashion our advice. I happen to know that all his personal investments are in silver so he is definitely eating his own cooking. Because of his all-out bullishness on silver we have to stress that he operates with a care and cautiousness befitting of a mature and shrewd analyst. He understands the futures market like few others. Despite his profound and pioneering analysis of silver, surprisingly few gold and silver editors have embraced his breakthrough opinions. Either because of ego or stubbornness other precious metals analysts are invariably barking up the wrong tree. Mr. Butler has for years been the sole purveyor of the truth about silver….Read More »

There is a flip side to everything and mainly as a result of the terrible beating it has taken over the past few years, the upside cycle for silver appears to be at hand. Not only is silver at a stupid cheap price, it has everything necessary to rally sharply and soon. This week, for the first time in my memory, the CEO of a leading silver miner, First Majestic, called on fellow silver miners to withhold production to break the back of the manipulation. If there’s one clear signal that a commodity’s price is too cheap, it is just that.

To an investor, a cheap price means low risk and a good time to buy. But what about the reasons for silver to rally and rally soon? Start with the largest speculative short position in history. You’ve heard me complain about a massive silver short position by JPMorgan and other banks for years, but I’m talking about something different now. While there is still a very sizable commercial paper short position on the COMEX, that is separate from the new historical short position in COMEX silver held by technical funds or traders who rely on chart signals alone to buy or sell….Read More »

“All of the things I look at in silver seem to be aligned for a sharp move up,” says Ted Butler, in an interview with Investment Rarities’ President Jim Cook. Butler explains that “The big commercial traders, led by JPMorgan, have managed to get all the technical hedge funds to plow into the short side of COMEX silver. The technical funds must buy back their thousands of short silver contracts since they can’t possibly deliver real silver.”

And in a more extended conversation, with Peak Prosperity‘s Chris Martenson, Butler reiterates that the technical funds “have no ability whatsoever to deliver physical metal and at the same time they’re shorting like crazy into a physical environment where there’s nothing but indications that the market on a wholesale, physical basis is very tight. And that’s a combination that you can just blow sky high in price.”

With the gold/silver ratio at 71.4 on Thursday, Bloomberg‘s “Chart of the Day,” from 2012 on in the above, cites a forecast by UBS that has the ratio falling to 65.6 in 12 months. That calculation is based on UBS’s bearish forecast of $16 for silver and $1,050 for gold. According to one of the bank’s Singapore-based analysts, the gold/silver ratio currently “stands near crisis levels, which ignores the fact that economic activity next year should accelerate, with developed markets advancing and emerging ones moderating somewhat. Increases in silver ETFs suggest that the holding power of silver investors is immense and the metal still attracts physical investors.” More from Mineweb‘s Lawrence Williams: “Expect big silver price surge if gold stays positive.”

See also:

SilverSeek/Coin News: Gold and silver end mixed as stocks stabilize; U.S. Mint sales – Core sets and Silver Eagles lead

Gold and silver futures decoupled from the whipsawingstock market on Thursday, gaining 1.6% and 2.1% respectively. “Gold is benefiting from a flight to quality as the stock market is heading into a correction,” according to a Comex trader quoted by Reuters, who added that “Both gold and silver appear to be bottoming out after they have been in a bear market for a long period of time.”

And MarketWatch cites the namesake of a Montreal-based research firm, Lamoureux and Co., who “said that he’s telling clients the Fed has no interest in increasing rates whatsoever. And that’s a positive for gold.” It goes on to quote Lamoureux as declaring: “We are super gold bulls now and think we have entered a new commodities bull cycle.”

As gold futures inched down on Thursday, and silver added about a half a percent, Comerzbank analysts noted that “Gold and silver have recovered somewhat from their respective multi-month and multiyear lows.” This as the U.S. dollar and the euro are said to “have turned modestly corrective this week, with the euro being boosted amid disappointment that the ECB didn’t make that final leap into QE.”

Referencing the above chart of The Disparity Index (TDI), for silver, which measures the relative position of its current price to the 40-week moving average, Gary Christenson calls attention to “the recent smash-down in silver prices and its deeply over-sold daily status,” which has led to a current daily silver TDI reading that’s “the most over-sold since the post-1980 crash.“

And in his weekly market wrap-up, Alasdair Macleod cites an exceptionally high volume of futures contracts being swapped for physical silver. “Could it be that this silver was required to be delivered to other markets,” asks Macleod, “such as Shanghai, where stocks are depleted and silver is trading at a price premium? Could it be that the acceleration of demand for silver eagles is indicative of the demand for physical silver at these low prices? If so, it is an indication that Comex is pricing silver futures too low to reflect genuine demand, and the price will struggle to go lower.”

Although spot gold and silver inched up on Monday, silver is hovering near a four-year low. But according to options trader Todd Horwitz, in the above interview with Bloomberg, silver’s “got real solid support around this $16, $17 level.” And reminding that “this is where we actually broke out when we went up to $50 an ounce,” he declares that “I’d be a buyer here at about the $17.50 level.” Concerning silver’s drop on a stronger U.S. dollar, and what many see as a stepped-up timetable for an interest rate increase, Horwitz argues that “all of the news is now built into the market, so I think this is a great spot to take a step in and take a shot at buying it.”